Apple has become the latest U.S.-based multinational to acquire an Israeli technology company — in this case, the flash storage firm Anobit Technologies. According to Wharton’s Leonard Lodish, the purchase reflects a larger trend of Israeli innovations in the digital signal processes arena.


Apple’s recent $390 million acquisition of flash storage company Anobit Technologies marks a minor milestone for the technology firm: Apple’s first acquisition of an Israeli company. Herzliya-based Anobit already supplies high-performance controllers that Apple uses for optimizing the memory capabilities inside such best-selling products as the iPhone and iPad. With the acquisition of Anobit, Apple will be able to secure its supply of that key technology for years to come.


Beyond its implications for Apple, the acquisition of Anobit reflects a broader trend of long-term significance, notes Wharton marketing professor Leonard Lodish. The purchase of Anobit “brings home the fact that the great majority of technical innovation that comes out of Israel involves digital signal processes at its core roots,” says Lodish. “And this is something that people learn in the military.” It’s no accident that signal-process technology is also used in the world of electronic warfare, where real-time location tracking is a vital concern. “In Israel, everyone goes into the military, so a lot of smart people [are working in] the Israeli military,” Lodish adds.


The technology supplied by Anobit “processes electrical signals at orders of magnitudes faster” than other technologies, he adds.  A significant number of iPhone users in Israel use this kind of technology to view real-time data about traffic flows generated by signals sent from the cell phones of people moving about the country. Thanks to Anobit’s advanced signal-processing technology, iPhone apps can drill down to an unprecedented level of local detail about traffic movements.


Apple is just one of a list of U.S. multinationals that have invested in an Israeli high-tech firm. Other firms that have bought Israeli companies include Google (QuickSee, LabPixies), 3M (Attenti), IBM (Storwize), and Motorola (Bitband.) In addition, Oracle has bought Convergin, a provider of network software, while AOL has acquired five Israeli technology firms, including ‘5min’ (free instructional videos), Mirabilis (instant messaging), Relegence (financial information search), Yedda (a questions and answers site), and Quigo (contextual search engine marketing.) Intel, which operates 4 R&D centers and two manufacturing plants in Israel, announced last November that it will invest $25 million over the next five years, to strengthen its cooperation with Israeli academia. Google has said that it will establish an incubator for Israeli start-ups this year.